In a letter submitted yesterday to Secretary of Education Arne Duncan, Senate Health, Education, Labor, & Pensions (HELP) Committee Chair Tom Harkin (D-IA) and ranking member of the House Education and the Workforce Committee George Miller (D-CA), voiced concern over the Department of Education's (ED) recent adjustment to the cohort default rate (CDR) calculation.
“As you well know, CDR sanctions are one of the few accountability measures the federal government uses to ensure institutions are providing students with a quality education deserving of federal support,” Harkin and Miller wrote. The changes to the calculation allow institutions that are not performing well to continue offering loans to students who are at risk of not earning credentials "meaningful enough for students to be employed and repay their debts," they posited.
In a September 23 electronic announcement, ED cited the increase in “split-servicing” situations— where borrowers have at least one loan being serviced by a FFEL servicer and also have one or more loans being serviced by a federal loan servicer— as the primary reason for the change. Harkin and Miller acknowledged that there might be instances where split-servicing led to higher rates of default, but there was “no evidence” that split-servicing resulted in default rates high enough to require sanctions.
The letter went on to express concern that ED is not doing enough to help borrowers pay back student loans that are in default. In order to "better understand the steps ED is taking to help affected borrowers," Harkin and Miller furnished a list of nine questions that inquire, among other things, about:
The ranking democrats requested that Duncan respond to the letter with answers to their questions within 30 days of receipt.
Publication Date: 11/19/2014